In a major blow to Grooveshark, a five judge panel of the New York Supreme Court’s appellate division ruled that music recorded prior to 1972 was not
covered by safe harbor provisions of the Digital Millennium Copyright
Act. Under Safe Harbor, sites are not liable for users' infringement,
as long as they remove pirated material at the content owner's request.

Earlier, a state trial court had ruled against Universal on pre-192 recordings. Yesterday the appeals court based its new decision on the
portion of the Copyright Act that says the DMCA doesn't “annul” or
“limit” common law copyright protections for sound recordings prior to 1972.

The New York judges also noted that their decision conflicts with a 2011 ruling, Capitol Records vs. MP3tunes, that said that DMCA did extend to works before 1972. While Grooveshark says it will appeal today's decisions, it also creates a new headaches for many sites including YouTube who allow users to upload music.

Can Grooveshark Continue?

The larger underlying lawsuit between Universal and Grooveshark also remains
unresolved, as does an ongoing Grooveshark dispute with Digital Music
News. But Grooveshark may be running out of resources to fight its legal battles. CEO Sam Tarantino gave several interviews earlier this week crying poverty. "I am like literally broke." Tarantino told Mashable.

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N.Y. Court Rules Against Grooveshark In Universal Music Battle

In a major blow to Grooveshark, a five judge panel of the New York Supreme Court’s appellate division ruled that music recorded prior to 1972 was not
covered by safe harbor provisions of the Digital Millennium Copyright
Act. Under Safe Harbor, sites are not liable for users' infringement,
as long as they remove pirated material at the content owner's request.